Chapter 3. The Foundation Of Economic Liberty

CHAPTER THREE

THE FOUNDATION OF ECONOMIC LIBERTY

THE RIGHT OF A PERSON to the product of his own labor is the foundation of economic liberty. The requirements of liberty in the economic realm can be met in no other way.

The question at issue is how to distinguish between what is mine and what is thine. The hermit is not concerned about this matter, which becomes a problem only when two or more persons have relationships with one another.

There are three ways to handle this problem:

1. Each person may have whatever he can grab.

2. Some person other than the one who produces the goods and services may decide who shall have the right of possession or use.

3. Each person may be allowed to have whatever he produces.

These three methods cover all the possibilities; there are no others.

The first of these plans for distinguishing between mine and thine is the law of the jungle. It rests on the concept that might makes right; that the right of possession goes along with the strength and the power to take something from another. This method makes ownership hazardous and highly unstable. Under such a system, the one who produces anything faces the immediate danger that it will be taken from him against his will. It may then be stolen from the thief, and stolen again from the second thief — again and again until it has been consumed. An economy conducted in this manner will remain primitive, or will return to the primitive state, living largely on the “natural products” of the forests and the streams.

The law of the jungle discourages production and encourages consumption of even the little that is available; there is every urge to squander, and little or no incentive to thrift. He who would be enterprising, and who would create and use the tools of progress, is discouraged from doing so because of the likelihood that they will be taken from him by robbers. Wolves live in this manner; members of the pack subsist on what they can grab from the carcass of a sheep that has been pillaged from the farmer who reared it. An economy of this design will never build a Detroit, or a Radio City, or a great institution of research and learning. And it violates the tenets of liberty, for reasons which will be discussed later.

The second method of determining the rights of possession is the one on which every form of authoritarian society is founded, no matter what its name. According to this concept, someone other than the producer is empowered to decree who shall have whatever is produced. The means by which this person has gained this power, and the claims of “justice” which he attaches to his decrees, are not relevant at this point in the discussion. Sufficient for present purposes is the observation that he is empowered to confiscate that which others have produced, against the wishes of the producers, and to do with it as he chooses. It gives to the dictator, and to no one else, the right of spoliation; so it must be rejected as the design for a society wherein widespread liberty is to abound.

The only method consistent with liberty is the one that distinguishes between mine and thine according to the rule that the producer shall have the right to the product of his own labor. This foundation of economic liberty is important above all other considerations. By this concept, the right of ownership arises simultaneously with the production of anything; and ownership resides there until the producer-owner chooses to consume the product or to transfer its ownership to another person through exchange, gift or inheritance. The right to produce a thing thereby becomes the right to own it; and to deny one right is, in effect, to deny both. This concept specifies that no part of production shall properly belong to a thief, or to a slave master or to a ruler by whatever title.

Each of the first two concepts for distinguishing between mine and thine accepts the right of a non-producer to take from the producer the product of his labor; to that extent they are alike. The difference lies in whether the taking is to be a private matter or a “public” matter. Some claim that one is for selfish purposes and that the other is for unselfish purposes; that the thief takes things for his own consumption or use, whereas the dictator takes them in order to help his subjects. Capone is supposed to typify the first and Stalin the second. But all these distinctions are none too clear, and none too convincing as to any important difference. Robin Hood was supposed to have helped poor people with the fruits of his plunder; to which group should he belong? Some thieves are famed for their contributions to “worthy causes"; to which group should they belong? Many or most of the world’s dictators and leading politicians have thickly feathered their own private nests with the proceeds of their public plunder; to which group should they belong? The one clear conclusion is that, from the viewpoint of the producer, his product has been taken from him against his wishes in both instances alike.

Those who are devoted to the second, or authoritarian, concept often confuse the first and third methods. They claim that both follow the law of the jungle. They fail to note the important distinction that the third method gives the person the right to the product of his own labor only, whereas the first gives him the right to grab that of his neighbor. In failing to note this most important distinction, and in rejecting both, these persons then advocate the only remaining alternative — the one which gives to a third party the right to take the product from both the producer and the robber. It is as though a widening of the range of take, so as to include the producer as well as the thief, somehow turns a vice into a virtue.

The method consistent with liberty, which gives a person the right to the product of his own labor — that and no more — gives everyone the same right so that no person is granted a license to trespass on the rights of others. It should be perfectly clear that if all persons are to have the right to the product of their own labor, they cannot in addition have claim to any of the product of another’s labor; otherwise the rights of everyone will have been violated. There is no way to make the whole equal more than its parts. Geographic property rights, similarly, are destroyed whenever each person is allowed to move his legal boundary wherever he may choose.

The three concepts by which to distinguish between mine and thine have been defined in their pure forms, as they would operate wherever they are followed clearly, logically and without the confusion of dilution. Despite the current popularity of the “mixed economy” as a design for society, each person must accept as a principle of justice one or another of these three designs. In advocating and supporting another, either as part of a mixture or in pure form, he thereby surrenders his principle and engages in what his principles tell him will be economic self-destruction.

ANYTHING PRODUCED is property, and the question of the right to own property is automatically a part of the question of rights to whatever is produced.

The terms “immediate consumption” and “saving” are commonly used in contrast with one another. Their difference is one of time only, not of type. That which is kept a little longer than the other is said to have been “saved.” The saving may be kept in kind, as wheat stored for winter; it may be sold, and the cash saved in a sock or in a bank or by putting it into some form of “investment” such as a farm or some other business.

The right of choice as to what is to be done with the product of one’s labor is the whole purpose of having the right to it in the first place. If one should have the right to the product of his own labor — the foundation of economic liberty — it follows that he should have the right to do with it as he pleases; he may eat it now or later; he may keep it as an aid to further production; he may give it to others, to family, friends or organizations, now or later. To say that he shall be denied this full range of choice is to deny the essence of his basic right to the product of his own labor.

Permitting each person to take whatever he can grab is a complete denial of rights to private property. What the robber is thereby entitled to possess is the property of the one robbed.

The authoritarian concept likewise denies the right to private property. Its violation of liberty is commonly camouflaged by enticing labels. It is claimed under this plan that “everything shall be owned by everyone,” with “ownership in common.” In reality, the dictator alone holds the right of ownership, because he alone can do with it as he wishes. The corollary of the right of ownership is the right of disownership. If a private citizen is prohibited from selling or consuming his share of what is “owned in common,” it is proof of the fact that he did not really have the rights of ownership in the first place.

Little progress could ever have occurred anywhere in the world without the right of a person to own private property. And continued progress requires full protection of this right.

Apparently nine-tenths or more of the economic welfare in the more prosperous nations of the world results from the use of the accumulated tools of production rather than from human effort unaided by these tools. The arts and other non-economic forms of progress, in turn, depend on a degree of economic welfare that will allow these products of leisure to be developed without imposing starvation on one’s self and his family.

The tools that are necessary for economic prosperity and for “cultural progress” will not be accumulated except as the person who saves them is assured of continuing rights to their possession, as a storehouse for his savings. Attempts of the past to “force” persons to save under some plan by which rights of ownership belong solely to the master or to the one that governs the people have met an early failure. Saving ends, and past savings are consumed in an attempt to prevent a decline in the level of living.

Persons save for themselves and for those they love and respect, not for others neither known nor respected as worthy. They do not save for others unknown and for uses unknown, beyond their control. When private property is in constant danger of being taken from the one who has saved it, he will “eat today’s production today” rather than save. If the marauding is prevalent enough, he will not even find it feasible to save the seed for next year’s planting of food crops; and once the incentive to save is that far gone, civilization will have reverted back to the hunter society of primitive man.

It would seem, then, that the claim of one renowned person who said: “Only well-fed people can be free,” could more accurately be stated in reverse: “Only free people can be well-fed.”

Economic liberty prevails only if the individual person is permitted to save in the form of private property, and to use it as he sees fit. The famous philosopher Hume believed the right of private ownership of property to be the basis of the modern concept of justice in morals.¹ His belief deserves careful consideration.

Satisfying one’s wants with the least possible effort is the basic economic urge; it is the economic equivalent of the geometric concept that a straight line is the shortest distance between two points.

If this basic urge is unrestrained by morals, and by the foresight of consequences flowing from various methods of satisfying one’s immediate wants, the course of least effort is likely to seem to be that of stealing the food and things from one’s neighbor. Animals, lacking these moral and intellectual restraints, act in that manner and live by marauding. Man’s higher order of intelligence and foresight has codified into written and unwritten law a restraint from short-sighted fulfillment of his wants by marauding. He has established privateness of property, and stabilization of the rights of its possession. Under the intellectual and moral code of advanced forms of human society, man acts differently from these “lower animals"; and he can continue to live in an advancing society only so long as that code of conduct is not undermined and allowed to fall.

Of all the essentials for the establishment of an advancing human society, the right to private property, as a moral concept, seems fundamental. Socialism means: “A state or a system in which there is no private property.” Yet advocates of socialism claim for it the virtue of its being a system of society advanced beyond that of liberalism and rights to private property. How could socialism be an advanced form, when it embraces a concept that would have precluded the advancement of civilization?

The only advancement to be claimed for socialism is its advancement in the sense of time because, due to its inability to generate any accumulation of the tools required for an advanced society, it must subsist on the confiscation of what has already been produced under some other plan; it has to parasitize something. The confiscation of private property is civilization in retreat.

Is there any aspect of what may properly be called human justice that does not rest in one way or another, as Hume said, on the concept of rights to private property? Rights to private property are human rights; it is not a question of “human rights or property rights” as is frequently asserted.

In the analysis thus far it has been concluded:

1. That liberty is a human right, unlimited except as it is necessary to restrain one person from trespassing on the liberty of another (as will be discussed in later chapters).

2. That economic liberty is the safeguard of other forms of liberty, and apparently essential to their preservation.

3. That the right to the product of one’s labor is the foundation of economic liberty.

4. That the right to private ownership of property follows from the right to the product of one’s labor, because it is the inseparable “time aspect” of that right.

Thus, by successive steps, there is established a direct connection between property rights and human rights. The connection is one of harmony rather than of conflict. And one who would assert them to be in opposition to one another, and who speaks of “human rights or property rights,” must identify the point in this series of deductions where he would disagree.

Does he believe that liberty is inhuman rather than human, as a matter of rights; that a demonstration of “human rights” is to be found in the slave auctions of early days, or in the slave camps of modern Russia?

If not, does he believe that an economic slave is likely to be allowed to enjoy the other forms of liberty, and that it is those other forms that comprise the “human rights”?

If not, does he believe that economic liberty means prohibiting a person from having the product of his own labor?

If not, does he believe that a person can have the right to the product of his labor while being denied the right to keep any of it even for an instant?

If he believes none of these, he must believe that rights to private property are inseparably entwined with human rights.

Dwight D. Eisenhower, on the occasion of his induction as President of Columbia University, listed the private ownership of property as one of four “cherished rights” of persons. He said further that these rights are mutually dependent for their existence, without which human rights would soon disappear.

Any Bill of Human Rights that excludes the right to private property is doomed to futility and failure.

¹ Henry D. Aiken, Hume’s Moral and Political Philosophy (New York: Hafner Publishing Company, 1948), Book III.